California Took In Millions For 94,000 Dead People’s Phone And Internet Services

The story refers to fraud in the federal Lifeline program, where California’s state-run eligibility system allowed tens of thousands of deceased people to be used to draw federal subsidies for low‑income phone and internet service between 2020 and 2025.

What the report says

• The Federal Communications Commission’s inspector general found that Lifeline providers in three states claimed federal subsidies for more than 116,000 people who were already dead.​

• California was the largest source of the problem: over 94,000 deceased individuals were enrolled or kept enrolled and then claimed by providers, generating about 3.8 million dollars in federal Lifeline funds for service that should not have been paid for.

• These enrollments involved people who were already deceased at the time they were approved or who died but remained on the rolls, meaning providers continued to receive monthly credits as if they were still living customers.​

How the Lifeline program works

• Lifeline is a federal program funded through the Universal Service Fund that gives a monthly subsidy (typically around 9–10 dollars) per eligible low‑income household to help pay for phone or broadband service.

• Providers sign up customers and then get reimbursed by the program based on the number of enrolled Lifeline subscribers, which creates a financial incentive to keep or add ineligible accounts if oversight is weak.

Why California is singled out

• Most states use a federal “National Verifier” system to check eligibility and remove ineligible or deceased beneficiaries; California had an “opt‑out” waiver and ran its own process instead.

• FCC officials say California’s laws and data‑sharing rules made it harder to verify identities and check against federal death records, and they cited a “bad track record” on compliance with Lifeline rules.

• In late 2025, the FCC revoked California’s opt‑out status, forcing Lifeline applicants in the state to go through the federal verification system like most other states.

What happens next

• FCC Chair Brendan Carr has proposed rule changes aimed at tightening verification, cutting off subsidies tied to deceased or otherwise ineligible individuals, and making it harder for providers to profit from fraudulent enrollments.​

• The inspector general’s findings may lead to efforts to recover some of the improper payments and to possible enforcement actions against providers or entities that claimed Lifeline funds for dead beneficiaries.

Broader context

• Fraud involving payments for deceased people is not unique to Lifeline; audits of other federal programs such as Medicaid have also found hundreds of millions of dollars in erroneous payments issued on behalf of people who had already died.

• Policymakers on both sides of the aisle have used these findings to argue for more aggressive cross‑checking of beneficiary lists against federal “death files” and stronger penalties for agencies or contractors that fail to maintain accurate rolls.